SC OKs P1.7-B Comelec-Smartmatic deal

Supreme Court of the Philippines. FILE PHOTO

THE SUPREME Court (SC) has affirmed the Commission on Elections (Comelec) awarding last June to Smartmatic-Total Information Management (TIM) Corp. of a P1.72-billion contract for the lease of an additional 23,000 vote-counting machines for this year’s national and local polls.

Voting 14-0, the court en banc, in a 41-page decision dated Dec. 8 but released only last week, denied for lack of merit the certiorari case filed by former Comelec Commissioner Augusto Lagman, Leo Querubin and Ma. Corazon Akol, convenors of the poll watchdog Automated Election Systems (AES) Watch, to nullify the contract award.

The high court said Smartmatic-TIM was able to prove that it was 60-percent Filipino-owned and that its participation in the bidding while its articles of incorporation (AOI) were being amended was not enough legal basis to nullify its winning the contract.

The Comelec en banc had earlier reversed the decision of the agency’s bids and awards committee to disqualify Smartmatic-TIM for submitting a “defective” AOI, which only stated that the joint venture’s primary purpose was for the automation of the 2010 elections.

AES Watch filed the Supreme Court suit after the Comelec refused to reconsider its decision.

The Supreme Court, however, pointed out that the Comelec rules and government procurement regulations do not at all require the submission of AOIs.

“A perusal of the bidding documents would readily reveal that the procuring entity, the Comelec in this case, did not impose such a requirement [as] can be gleaned in the instruction to bidders,” the court said in the ruling written by Justice Presbitero Velasco Jr.

The high court also said that the 2010 contract required Smartmatic-TIM to provide the Comelec with continuing technical support beyond 2010, thus prolonging the company’s corporate life.

The issue had been mooted when Smartmatic was able to submit its amended AOI to the Comelec before the contract was signed in December, the court added.

The justices also said the petitioners failed to “offer any relevant evidence to substantiate their claim that the joint venture did not meet the 60-percent Filipino ownership requirement for bidders of government contracts.”

Documents presented by Smartmatic showed its Filipino owners held more than 60 percent of the joint venture’s shares of stock and was thus a legitimate Philippine corporation.

The “fatal flaw” in the petition, according to the justices, was that it did not challenge the nationality of the companies and individuals that owned the shares.

The contract for the lease of 23,000 optical mark reader machines was originally meant to supplement the 81,000 precinct count optical scan (PCOS) machines leased for the 2010 elections and purchased by the Comelec in 2012.

In April last year, the Supreme Court voided, for lack of a public bidding, the direct contract entered into by the Comelec with Smartmatic for the refurbishing of the 81,000 PCOS machines.